A surprising way to increase property values: build affordable housing

July 6, 2017                                                       By: Tracy Jan

Despite the lawsuits, media spotlight and conventional wisdom, affordable housing developments built in poor, heavily black communities can lead to greater racial and income integration, according to new research by Stanford economists.

Such housing, funded by federal tax credits, also raises property values and lowers crime in surrounding neighborhoods as higher-income white residents move in, the researchers found.

“When a corporate developer comes in and builds nicer, new housing, it makes the neighborhood more desirable as a potential place to live,” said Rebecca Diamond, a professor at Stanford’s Graduate School of Business who authored the study with her colleague Tim McQuade.

WASHINGTON, DC: People sit on the stoop of The SeVerna I apartment building in Washington, DC. (Photo by Jahi Chikwendiu/The Washington Post)

The surprising findings, to be published in the Journal of Political Economy, are being widely circulated this week among academics following a New York Times story asserting that federal tax credits for affordable housing promotes racial segregation despite the program’s intent.

While it’s true that such housing is disproportionately located in minority communities, the federal program actually results in more racially desegregated neighborhoods over time, said the researchers who analyzed a decade's worth of relevant data around more than 7,000 developments built with federal tax credits in 15 states................Read More